Burrows: Albertans got the budget they voted for

Commentary on Rachel Notley’s first budget as premier has, for the most part, zeroed in on the province’s fiscal outlook: a $6.1-billion deficit, total debt scheduled to hit $18.9 billion this fiscal year, and health expenditures on track to eat up almost half of the province’s revenues by 2017-18.

Undoubtedly, Alberta has seen better days, and the premier will, over the course of her first term in office, face a range of challenging decisions that involve balancing her government’s agenda against its broader fiscal impact.

But should we measure the merits of this budget, just six months removed from her election win, on the province’s fiscal outlook, or how the budget addresses the platform she won a mandate to implement?

In my view, a fair assessment should focus on the latter.

On May 5, voters unwaveringly chose a course of action that aims to push the province out of the economic downturn through stimulus, while achieving economic stability through diversification. In other words, economic diversification is the premier’s long-term plan to right the ship, and it’s the plan she was elected to implement.

So, this begs the question, and in my view, the fair question: has the premier’s budget addressed this plan?

Up front and centre, economic diversification is captured as one of the budget’s five core themes: “Developing a diversified 21st century economy.” From a communications perspective, diversification is positioned throughout the budget as the motivation behind a number of major programs.

By my reading, four policy pieces have the potential to address the premier’s agenda:

$540 million through the Alberta Investment Management Corp. (AIMCo) to invest directly into Alberta businesses;

$50 million in incremental funding for the Alberta Enterprise Corp. (AEC) to invest in venture capital funds;

$10 million for community economic development initiatives, and;

$178 million over two years for the $5,000 Job Creation Incentive Program, delivered on a first come, first served basis, starting in January 2016.

While these programs offer an approach to economic stimulus and job creation, they leave to question how these expenditures will facilitate economic diversification — the crux of Notley’s road to stability and sustainability.

For instance, mandating AIMCo to directly invest three per cent of its portfolio into companies will increase the capital available to Alberta businesses, but it doesn’t guarantee the investment will find its way beyond traditional industries like oil, gas and, increasingly, clean-tech. This leaves the province exposed to the possibility that its investment would continue to bet on traditional industries rather than helping non-traditional industries grow in order to facilitate the ultimate goal of diversification.

Similarly, while $50 million for AEC might increase capital available to Alberta businesses, the budget neglects to place guidelines around where these dollars will be deployed.

The same can be said for both the community economic development initiative and the Job Creation Incentive Program.

While it’s common practice for budgets to offer broad frameworks rather than strict terms and conditions, if the premier is intent on delivering on her plan of economic diversification, which I believe she is, it’s critical that her government develop parameters around these programs to ensure they don’t, in effect, double down on traditional industries.

So, has Notley’s budget addressed the plan she was elected to implement six months ago? To be fair, it has. In that respect, it’s the budget Albertans voted for. Has the budget addressed her plan to achieve economic stability through diversification? Not yet. But it still could, and we should give her time to do it.

Justin Burrows serves as chief of staff to Arlene Dickinson at Venture Communications and District Ventures, Dickinson’s not-for-profit business accelerator. He served as former federal finance minister Jim Flaherty’s policy adviser for economic development.

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